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Kyle Gulau

How Healthy Is Your Community’s Real Estate Ecosystem?

Updated: Nov 14, 2023

4 questions to gauge the health of development in your town


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Ideally, your development community is like a rainforest. A dynamic ecosystem of businesses that provide a diversity of thought, activity, and growth. Worst case your development community is a farm. Mass producing the same crop, run by a few people, and vulnerable to drought.


Usually, communities are focused on big developments. They’re the only ones who can pull off the big transformative projects.


For development to be successful in your community you need to consider the full spectrum of developers — large and small. Here are 4 questions to help you do that.


1. Is Small Development Happening?

I can’t tell you how many meetings I’ve been introduced to a developer and they say, “We’re just small developers…” and then proceed to present their $35m projects.


They might think they’re small but they’re not. Imagine a community where instead of 1 developer doing a $35m project you have 35 developers each doing a $1m project.


Small is doing >$1m projects. This is when locals are involved. This is where wealth is generated. This is how human-scale urbanism is created. Small projects also allow for tactical creativity.


If it’s small enough no fire suppression is needed. If it’s short enough you don’t need an elevator. This can avoid huge expenses and specialized contractors making development more accessible.


2. Do Developments Get Better Over Time?

Will this project get better over time and evolve with the neighborhood? Consider second-order thinking. What’s the use after this first proposed use?


A transformative project like putting in a big box store, a movie theater, hotel, or a carwash might seem great. But what happens when they leave?


You’re stuck with an empty hotel that can only be another hotel. Building and infrastructure that has a very specific purpose are difficult to reuse. Healthy developments get better over time.


3. What Level Of Entrepreneaulism Is Involved?

The simplest way to measure this, how many projects are involving small businesses?


Working with small businesses is spikey, quirky, and risky. Big developers don’t like that. They want the smooth, safe, investment of a Starbucks lease. Not the ups and downs that come with the local taqueria.


When you look at your development ecosystem, are developers working with small businesses? Or are they looking to bring in the next new thing? Then go back to question #2.


4. Would You Use The Word, “Purposeful”?

Are new developments what the neighborhood needs? Are we putting a Hard Rock Cafe in the middle of the poorest neighborhood? Or are we building a laundromat?


Are we building for building's sake? Or is there a purpose? Are we building a home for residents? Are we building a home for a small business?


Is the project brought to life by people who care? There’s a difference between the owner-occupied quadplex and the 60 units midrise. They both care and are invested in its success but those projects just feel different, don’t they?


Final Thoughts

The health of your development community is based on the range of developers you have (small to large) not the number of developers you have.


Consider how projects can get better over time. The secret of small rectangles has never been more important.


Review the level of entrepreneurism in your developments and include the word purposeful in your development vocabulary.


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